Independent Auditor's Report Finds Problems with Town of St. Joseph's Financial Operations
An independent auditor engaged to examine the Town of St. Joseph’s finances was unable to conduct the audit because officials could not provide the necessary accounting records and supporting documentation. As a result, the independent auditor declined to issue an opinion on the accuracy of the Town’s 2015 financial statements, the Legislative Auditor said in a report released today.
The independent auditor noted several problems with the Town’s financial operations, some of which were repeat findings from 2014. The problems included:
· The Town has inadequate segregation of duties. For example, in addition to being one of the check signers, the mayor also approves transactions, prepares the checks, records the transactions into the accounting system, and reconciles all bank accounts.
· The Town’s written policies and procedures governing financial reporting are not complete. Those policies the Town has established are not readily available or communicated to employees.
· The Town’s Board of Aldermen is not receiving financial information during the year other than to approve the general fund’s original and revised budgets. The Board also has not been provided any financial information about the Town’s Utility Fund.
· The Town has not developed or implemented adequate internal control policies over vendor disbursements, use of credit cards, travel, personnel files, or payroll disbursements.
· The Town did not comply with the IRS tax code and incurred penalties and interest that totaled $54,195 as of June 30, 2015
· The Town does not have written policies and procedures for utility customer account adjustments and disconnections.
· The Town’s audit report for the fiscal year ending June 30, 2015, was not finished within the statutorily required six-month deadline.
· The Town’s Police Department does not have written policies and procedures in place to account for traffic citations and fines for other offenses.
Currently, the Town is on the Legislative Auditor’s noncompliance list, which means officials cannot access approximately $8.3 million in grants and other funding that will be used to repair the municipal water system. The state Department of Health and Hospitals has cited the Town for several violations related to the water system, and residents have complained repeatedly about the water’s color and odor.
In addition, the state Fiscal Review Committee voted in April to petition the court to appoint a fiscal administrator to take over management of the Town’s financial operations, the state auditor said. A hearing is scheduled for June 6.
For more information contact:
Legislative Auditor
225.339.3800